It joins the push to provide more
performance-based data as part of business intelligence
offerings.
As analytics becomes an increasingly
important cornerstone of business man-agement, companies are
looking for business intelligence software tuned to the needs of
their finance, sales, and marketing departments. To meet that
demand, vendors are snatching up smaller purveyors of these
performance management tools.
The latest to make a grab is Cognos.
It said last week it would pay $339 million for Applix, a maker of
financial performance management software. Applix, which says it's
on target to grow more than 30% this year to about $70 million in
revenue, was itself part of the buying binge, having acquired
budgeting and forecasting software company Temtec in June of last
year.
The Cognos-Applix deal follows on
Oracle's $3.3 billion acquisition in March of Hyperion, the
financial performance management market leader; Business Objects'
$300 million Cartesis buy in April; and SAP's purchase of
OutlookSoft in May. Business Objects this week is releasing
BusinessObjects EPM XI, a suite that includes its own technology,
that of Cartesis, and ALG Software, a company it acquired last
September for $56 million.
FINANCIAL THINKING
The old way of doing BI was to have
IT take generic reporting and query software, dashboards, and other
tools and either customize them for specific users, or make the
best of them as is. Now, performance management tools are
prepackaged with features designed for specific job functions. One
of the biggest demands is for software that helps CFOs and their
finance departments plan, budget, analyze, and monitor profits and
sales, as well as comply with government regulations.
Applix, for example, brings Cognos a
set of tools for analysis in areas such as profitability and
price-volume variance--"complex areas we haven't been addressing
for our customers," says Mychelle Mollot, Cognos' VP of market
strategy. Applix has 3,000 customers, and Cognos has 3,500 for its
financial performance management software, called Cognos 8
Planning, Controller, and Business Intelligence
Applications.
Besides getting Applix's customer
base, Cognos plans to capitalize on Applix's in-memory technology,
a fledgling approach to BI that's gaining acceptance. That
technology uses 64-bit servers that let the software perform
analysis within a server's memory. The conventional approach to BI
calls for the IT department to build online analytical processing
cubes to analyze data. But lower memory costs make in-memory
analytics more feasible, letting users bypass IT and get faster
answers to queries.
In-memory analysis is more
appropriate for determining future outcomes, because it lets people
make changes on the fly, Mollot says. "It can be done at the speed
of thought," she says. Traditional online analytical processing
remains more appropriate for analyzing historical
information.
QlikTech, a startup that's been the
fastest-growing BI company the past year, with sales that nearly
doubled last year to $44 million, has grown largely on the strength
of its in-memory analytics platform.
Despite the consolidation that's gone
on lately, the business intelligence market remains fragmented
among many vendors. Cognos, with 10% of the BI market, trails only
Business Objects (14%) and SAS (11%) in market share. It grew 9.8%
last year, just under the industry average of 11.5%, according to
IDC. The performance management segment of the market is growing a
bit faster, at 13.5%. Business Objects grew 7%, while SAS grew
nearly 17%. Hyperion, Microsoft, and Oracle had growth rates above
the industry average.